CBSE Class 10 Social Science Important Questions and Answers: Economics Chapter 3 Money and Credit

If you are looking for CBSE Class 10 Term 2 Social Science Important Questions then you are at the right place. We have given important questions of CBSE Class 10 Term 2 Social Science on this page. The Central Board of Secondary Education will conduct the CBSE Class 10th Term 2 Exam from 26 April 2022. CBSE Term 2 Datesheet 2022 is not released yet, the board has provided sample paper to make students familiar with CBSE Term 2 Exam.

CBSE Class 10 Social Science Important Questions and Answers: Economics Chapter 3 Money and Credit

Class 10 Social Science Important Questions with Answers 

Below you will find important questions and answers for CBSE Class 10 Social Science.

  1. Which one of the following is a formal source of credit?
  1. Traders
  2. Cooperative societies
  3. Moneylenders
  4. Friends and relatives

2. What is the main source of income of a bank?

(a) Bank charges that the depositors pay for; keeping their money safe is the main; source of the bank’s income.

(b) The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.

(c) Banks earn huge amounts of money by investing the money of the depositors in various company shares.

(d) The Government of India gives huge amounts of money to the banks to help their smooth functioning.

3. Which one of the following is the appropriate meaning of collateral?

  1. It is the sum total of money borrowed from banks.
  2. The amount borrowed from friends.
  3. It is an asset of the borrower used as guarantee to a lender.
  4. The amount invested in a business.

4. At present which form of money is increasingly used apart from paper money?

(a) Commodity money

(b) Metallic money

(c) Plastic money

(d) All the above

5. Which one of the following is the newer way of providing loans to the rural poor, particularly women?

  1. Cooperative Banks
  2. Grameen Banks
  3. Self-Help Groups
  4. Moneylenders

6. Banks use the major portion of the deposit to:

(a) Keep reserve so that people may withdraw

(b) Meet their routine expenses

(c) Extend loans

(d) Meet renovation of the bank

7. Double coincidence of wants means ____________.

  1. What a person desires to sell is exactly what the other person wishes to buy.
  2. What a person desires to sell is exactly what the other person also wishes to sell.
  3. What a person desires to buy is exactly what the other person also wishes to buy.
  4. None of the above.

8. Which one of the following is not included in the terms of credit?

(a) Rate of Interest

(b) Mode of payment

(c) Rate of saving

(d) Collateral

9. Banks use the major portion of the deposits to

  1. Extend loans
  2. Invest in infrastructure
  3. Deposit in foreign banks
  4. None of the above

10. A person can withdraw money from a bank by issuing a cheque. What is a cheque?

(a) Loan taken by the bank.

(b) Loan taken by the depositor from the bank.

(c) Paper instructing the bank to pay a specific amount.

(d) Paper valid to withdraw money

11. Which of the following statements are correct?

  1. Members of a cooperative pool their resources for cooperation in certain areas.
  2. Besides banks, the other major source of cheap credit in rural areas is the cooperative societies.
  3. There are several types of cooperatives possible such as farmers’ cooperatives, weavers cooperatives, industrial workers cooperatives.
  4. All of the above statements are true.

12. All the banks act as mediator between————- and ———-.

  1. rural people, urban people
  2. literates, illiterates
  3. people, government
  4. depositors, borrowers

13. Which of the following statements is false

  1. There is no organisation which supervises the credit activities of lenders in the informal sector.
  2. RBI stops the money lenders from using unfair means to get their money back.
  3. Compared to the formal lenders, most of the informal lenders charges much lesser interest on loans
  4. All of the above

14. Organised credit is also called

  1. informal credit
  2. formal credit
  3. cooperative credit
  4. none of these

15. Name the system in which the double coincidence of wants is an essential feature.

  1. Barter system
  2. Money economy
  3. Global economy
  4. None of these

16. Match the following with the appropriate reason people might borrow money for:

a) Auto rickshaw driver I) To buy a house

b) A businessman whose factory has been closed ii) To buy a new shop for him 

c) Small trader iii) To revive his business

d) Govt. servant iv) To buy a new vehicle.

17. Which of the following could lead to a debt trap?

  1. The high interest rate for borrowing can mean that the amount to be repaid is greater than the income of the borrower.
  2. Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loan.
  3. The high interest rate for borrowing can mean that the amount to be repaid is lesser than the income of the borrower.
  4. both (a) and (b)

18. The modern currency is without any use of its own, then why is it accepted as a medium of exchange?

  1. Because it is convenient
  2. It has digital and manual system
  3. It can be used in foreign exchange
  4. Is authorized by the government of the country

19. Since money acts as an intermediate in the exchange process, it is called

  1. Medium of trade
  2. Medium of Exchange
  3. Medium of Business
  4. Medium of transaction

20. People also have the provision to withdraw the money as and when they require the deposits in the bank accounts to be withdrawn, what are these deposits called?

  1. Fixed deposits
  2. Savings
  3. Demand deposits
  4. Demand drafts

21. Madhurim wants to withdraw Rs 20,000 in cash for making payments to Prem after Prem receives the

money, he deposits it in his own account? What is the result?

  1. Salim’s balance in his bank account increases and Prem’s balance increases.
  2. Salim’s balance in his bank account decreases and Prem’s balance increases.
  3. Salim’s balance in his bank account increases and Prem’s balance decreases
  4. None of the above

22. The facility of cheques against demand deposits makes it possible to directly settle payments without the use of………

  1. Deposit slip
  2. Cash
  3. Moneylender
  4. Other funds

23 ………….refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.

  1. Debit
  2. Cash transaction
  3. Credit
  4. Trade

ASSERTION REASON QUESTIONS

DIRECTION : Mark the option which is most suitable :

(a) If both assertion and reason are true, and reason is the correct explanation of assertion.

(b) If both assertion and reason are true, but reason is not the correct explanation of assertion.

(c) If assertion is true, but reason is false.

(d) If both assertion and reason are false.

  1. Assertion: In India, no individual can refuse to accept a payment made in rupees. 

Reason: Rupee is the legal tender in India.

  1. Assertion: The facility of demand deposits makes it possible to settle payments without the use of cash.

Reason: Demand deposits are paper orders which make it possible to transfer money from one person’s account to another person’s account.

  1. Assertion: In India, no individual can refuse to accept payment made in rupees.

ReasoN: Rupee is the legal tender in India

  1. Assertion: Banks keep only a small proportion of their deposits as cash with themselves.

Reason: Banks in India these days hold about 15 per cent of their deposits as cash.

5 Assertion: The modern currency is used as a medium of exchange; however, it does not have a use of its own.

Reason: Modern currency is easy to carry

  1. Assertion: Banks charge a higher interest rate on loans than what they offer on deposits.

Reason: The difference between what is charged from borrowers and what is paid to depositors is their main source of income.

  1. Assertion: Banks charge a higher interest rate on loans than what they offer on deposits.

Reason: The difference between what is charged from borrowers and what is paid to depositors is their main source of income.

  1. Assertion: Rohan took credit in the form of advance payment from a buyer and he delivered the goods to the buyer on time and also earned profit. The credit made Rohan better off in this situation.

Reason: Credit can never push a person into a debt trap.

9, Assertion: Credit would be useful or not depending on the risk involved in a situation.

Reason: The chance of benefiting from credit is highest in the agriculture sector.

  1. Assertion: Credit would be useful or not depends on the risk involved in a situation.

Reason: The chance of benefiting from credit is highest in the agriculture sector.

1 MARK QUESTIONS : –

Que.No.1: What is per capita income?

Ans:- Average income

Que.No.2: Which neighboring country has better performance in terms of human development than India?

Ans:  Sri Lanka

Que.No.3: What does HDI stands for?

Ans: Human development index

Que.No.4: What does national income refer to?

Ans:  The value of the total goods and services produced within a country in a year.

Que.No.5: Define sex ratio.

Ans:  Total number of females per thousand males in a country.

Que.No.6: Define economic growth.

 Ans:  It refers to the increase in per capita GDP of an economy over a long period of time.

Que.No.7: Define infant mortality rate.

Ans: The number of children that die before the age of one year as a proportion of 1000 live children born in that particular year.

Que.No.8: Which state of India has the lowest infant mortality rate?

Ans:  Kerala

Que.No.9: Which state of India has the least per capita income?

Ans:  Bihar

Que.No.10: Give one common development goal of the people.

Ans:  Peace and security 

3 MARKS QUESTIONS : –

Que.No.11: What does national development refers to?

Ans: It refers to the ability of a country to improve the social welfare of the people. For example, by providing social amenities such as quality education, potable water, transportation, infrastructure and medical care.

Que.No.12: Mention any three limitations of per capita income as an indicator of development.It does not tell us anything about the distribution of income.

Ans:  

  1. It does not tell us anything about the distribution of income.
  2. It does not measure various facilities.
  3. It is affected by size of population.

Que.No.13: Distinguish between a developing country and a developed nation.

Ans: Developing country:-  The standard of living is low.

Per capita income is low.

The rate of capital formation is low.

Developed Nation:- The standard of living is high.

Per capita income is high.

The rate of capital formation is high.

Que.No.14: Mention any three characteristics of development.

Ans:    1. Different people can have different development goals.

           2. A mix of goals for development.

           3. Development for one may not be development for others.


Que.No.15: Besides income, what are other six things people may look for growth and development?

Ans:   Peace

  1. Regular income
  2. Good health
  3. Desirable living standard
  4. Good working conditions
  5. Equal treatment

Que.No.16: Distinguish between human development and economic development.

Ans:  Human development:- 

  1. human centered approach
  2. indicated by HDI
  3. wider term

        Economic development:-     

  1. it is continuous and sustained growth in an ecnomy along with a general improvement
  2. indicated by PCI
  3. narrow term

Que.No.17: Distinguish between Human Development Index and World Development Report

Ans:  Human development index:-

  1. Stresses on good and quality life
  2. Parameters are good education, health facilities etc.
  3. It includes literacy rate, life expectancy, infant mortality etc.

World development report:-

  1. Stresses on rise in PCI
  2. Parameters are quantities aspect of development.
  3. It includes GDP, national income and PCI.

 5 MARKS QUESTIONS :-

Que.No.18: What is sustainable development? Suggest ways in which resources can be used judiciously.

Ans: Sustainable development refers to the development without hampering the needs of the future generations so that the future  generations may enjoy the benefits of nature to the fullest some ways in which the resources can be used judiciously are as follows:-

  1. Economic extraction of resources.
  2. Use of alternative resources.
  3. Less use of non-renewable resources.
  4. Limiting waste material at production level.

Que.No.19: List a few example of environment degradation that you may have observed around you.

Ans: 

  1. Deforestation
  2. Soil erosion
  3. Ozone depletion
  4. Air and water pollution
  5. Wasting of fossil fuel
  6. Lowering of water level.



Que.No.20: In what respect is the criterion used by the UNDP for measuring development different from the one used by the world bank?

Ans:  1  UNDP compares the development of the countries on the basis of literacy rate, gross enrolemrent ratio and health status of their people. World bank compares on the basis of PCI.

         2. UNDP rank countries as first, second and so on. Whereas world bank divides countries into three categories.

         a.  Developed
         b.  Developing and under developed.

         3. UNDP has brodes concept of development and the world bank has a narrow concept of development.


Que.No.21: Main criterion used by the world bank in classifying different countries. What are its limitations?

Ans:  Limitations;- 1. PCI is affected by the size of population

                              2. PCI does not tell us about distribution of income.

                              3. PCI does not tell about the availability of services and facilities that influences the quality of life.

Que.No.22: Describe the criterion used by the HDI in classifying different countries.

Ans:  a. literacy rate

         b. infant mortality rate

         c. access to clean drinking water

         d. standard of life.

         e. body mass index

         f. life expectancy

         g. health fascilities

Que.No.23  What is the classification of countries basis on per capita income criteria of world bank?

Ans:  1. Rich/developed/high income countries:- US$  12616   Per annum or above

         2. Middle income or developing countries :- US$1530 Per annum  or more

         3. Low income countries/poor/underdeveloped country:- US$ 1035 Per annum or less

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